Document Management in Legal Practice
Documents Are the Bread & Butter, and Weapons, of the Legal Community
In legal practice, documents are primary. Documented statutes and rules, and case law, are the bread and butter of the legal community. And documents are the weapons that they use to attack. Large law firms are known to drown their opponents in a flood of paper by filing numerous suits. The better that they could manage their documents, the greater their competitive advantage, other things being the same.
We will now look at the key elements of legal practice and documentation, and see how a good DMS could help the legal community.
Legal Practice
Law firms, created by a single lawyer or a thousand or more lawyers working in different roles, carry out legal practice.
Legal practice involves:
- Advising clients about their legal rights and responsibilities
- Representing them in civil or criminal cases
- Representing clients in other contexts, such as business transactions like mergers and acquisitions
While large firms undertake all kinds of cases through their specialist groups, smaller firms might focus on a single specialty, like patent law or tax law.
Documents and Their Management
We look at the different classes of documents used and generated during a legal practice, and how they could be managed:
- Law Library: Lawyers have to refer to relevant statutes, rules, precedents (case law) and other materials to prepare their submissions. A big reference library is a typical feature of law offices. Nowadays, the library could reside in computers or even on the Web. Users could access what they need far more quickly using search programs.
- Readymade Documents: Lawyers are often called to draft different kinds of agreements like Mortgage agreements, M&A agreements, Employment contracts, Tenant agreement, Supply contracts and Last Will & Testament. Instead of doing it from scratch each time, they typically use templates stored in the computer, or downloaded from the Web, to speed up the work.
- Work Documents: Submissions, correspondence, contracts, briefs and so on are the work documents that law firms typically produce. Instead of keeping all these on paper, a large part could be created or converted into digital formats and stored on compact computer disks with huge storage capacities.
- Time Sheets: Lawyers bill clients on the basis of the time they spend on each case. It is therefore necessary to record these times accurately to avoid under or over charging. A good computer-based DMS will have facilities for easy recording of the times.
- Payroll: In large firms, even some of the lawyers are likely to be paid employees. Both large and small firms would employ supporting staff. This would require maintaining not only attendance records and payrolls, but also other kinds of records mandated by employment laws.
- Accounting Records: Purchases, expenses, bills and other business transactions have to be accounted and periodic Income & Expenditure statements have to be generated. This is done using accounting software these days, making the work much faster and more accurate.
- Cash Control: It has been reported that law firms need a reserve of cash to meet the outgoes for 105 days. On an average, work remains unbilled for 65 days, and then the bill takes another 70 days on the average to be paid. The firms get credit for 30 days and for the remaining 105 days, they have to find the cash. This means that good cash control is a must. A tight control could be exercised only through constant review of:
- Hours not yet billed
- Due dates of bills sent
- Bills remaining unpaid after due dates
- Preparing cash forecasts estimating payments, receipts and deficits by week
Conclusion
The volume of documents in a law practice would be quite large even in the smaller firms. A good Document Management System would aim to speed up creation, updating and retrieval, and other tasks like storage and security.